This New Investment Firm Lets You Pay Whatever You Want For Its Service

Aspiration, an online
investment firm that launched Tuesday, has a radical idea.

Unlike traditional investment firms, which charge a percentage of
the assets invested, the company plans to go in another
direction: Pay whatever you think is fair.

"Our fee structure is very revolutionary," explains CEO and
founder Andrei Cherny. "It empowers customers to make that
decision and gives them the ability to decide whether or not
we're doing a good job for them, and whether or not our values
are aligned."

He points out that in most investment firms, the people managing
your money get paid the same amount whether or not they do a good
job, and that hinging the company's livelihood on pleasing
customers provides an incentive to serve them well.

Cherny, who has a long history in financial regulation, ranging
from a position as a financial fraud prosecutor to working with
Senator Elizabeth Warren fighting for the establishment of the
Consumer Financial Protection Bureau, built his investment firm
for middle-class investors, who he says are under-served in the
current market.

"We're bringing forth a wide range of investment products and
investments geared toward the needs of the middle-class
investor," he explains. "Look at the customer base of hedge funds
and private equity shops. They serve a clientele that's mostly
multimillionaires and large institutions. Everyone else is buying
stocks and mutual funds, doing it on their own."

Aspiration is so committed to serving the middle-class investor
that it has imposed not only the usual minimum investment
requirements on its clients (in this case, an unusually low
$500), but also a maximum investment: $100,000 per customer, per
fund.

Cherny says the cap is to keep the company focused on the
under-served investor. "If you have a fund where some people pay
$500 and a handful put in $10 million, you're almost naturally
focused more on that type of customer." With the investment cap,
Aspiration aims to limit that sort of bias.

On
the Aspiration site, you can manage your investments and
charitable contributions.Aspiration

Aspiration — whose motto is "Do Well. Do Good." — is also
focused on giving back to the community. Through its "Dimes Worth
Of Difference" campaign, it donates 10 cents of every dollar of
revenue to provide micro-loans to struggling Americans.

Additionally, users are encouraged to give the amount of their
choosing to the charity of their choice on the website's
dashboard. "It's the TOMS and Warby Parker approach to charitable
giving," explains Cherny, "but instead of shoe for shoe, it's
economic opportunity for economic opportunity."

The homepage of Aspiration
is different than the sites of more traditional investment
firms.Aspiration

Cherny isn't worried that his clients will refuse to pay.
"A lot of behavioral psychology over the past 10 or so years
shows that people have a strong sense of moral obligation and
reciprocity," he explains. "That's as powerful or more powerful
than locking people into a legal contract. If we're not
delivering the products we said we would or living up to the
values we set up for ourselves, they have the ability to not pay
us."

However, Cherny isn't alone in his confidence. The company, which
has spent a little over a year getting ready for launch, has
raised over $4.5 million in funding and counts eBay founding
president Jeff Skoll as a member of its board of advisors.
Aspiration's "radical approach to its customers' fees relies on a
trust-based model, consistent in spirit with an approach that I
saw drive eBay's early success," Skoll said in a press release.
"It's a bold bet and one that I believe will shake up a financial
industry that could use some positive disruption."

Aspiration is now in an invite-only period, and will allow
potential clients to "jump the line" by sharing information about
the company on social media.